Chain of Thought

Secret of Business Life? One Thing…

If you remember the movie "City Slickers" with Billy Crystal and Jack Palance, you'll remember one key scene. It's the one where the two of them are talking about the meaning of life and the Palance character asks the Crystal character "Do you know what the secret of life is?" Crystal's guy says "No, what?" Palance holds up his gloved index finger and says "This. One thing. Just one thing. You stick to that and everything else don't mean @#*$!"

Crystal asks, “But what's the one thing?"

Palance answers, “That's what you've gotta figure out."

If those two guys had been supply chain managers, the Palance character might have had an answer for what that one thing is.

“Flexibility.”

But what's that? THAT'S what you've gotta figure out.

Dr. John Langley made flexibility the theme of the recent Georgia Tech Supply Chain Executive Forum. Some 35 executives from leading companies engaged in a two-hour working session on this topic. It seemed everyone figured out a different definition of flexibility. Here are a few:

“The ability to respond to fluctuations in demand or capacity with minimal impact on costs or service.”

“The ability to deal with last minute changes to the ‘make and move' portion of the supply chain such that the right product is delivered to the right selling floor at the right time.”

“Producing the right goods (down to color and size level) and moving at the appropriate speed (air v/s ocean) to deliver the right product to customer.”

“Having supply chain analysis tools in place to model flow and networks to support growth strategies.”

“The ability to utilize existing resources and assets to create and deliver multiple outcomes.”

“The capacity and capability to respond to demand requirements by expanding, contracting, or creating new supply chains/routes to market.”

Despite these variations, 67% agreed that supply chain flexibility is very important, and 25% ranked it as “highest priority.” Why?

“To become more demand driven.”

“To accommodate rapidly changing customer needs."

“To deal with globalization." and,

“Speed to market.”

Equally interesting were the barriers keeping these executives from their one thing: organizational structure and culture, cost pressures, the difficulties in putting value on flexibility, and, ironically, poor flexibility of supply chain software and poor system integration.

Quantifying flexibility's value is a big challenge. It's why trading partner collaboration is so difficult. “If it cannot be valued, it will not be included in the priority initiatives,” the Forum participants concluded.

Kevin Hume, principal of Tompkins Associates and one of the members of the Georgia Tech Supply Chain Executive Forum concluded: “Most executives will need to figure out where it is most beneficial – with which group of customers, what product categories, what flow of goods – and determine if differentiation there will result in customer preference and thus revenue or margin growth. The followers who work continually toward standardization and stability and ignore flexibility will likely be left behind.”

To put flexibility in another context, think of what it did for those 33 Chilean miners who were brought to safety after being trapped a half-mile underground for two months. If it hadn't been for the flexible logistics thinking and problem-solving talents of those miners below and their rescuers above, there would have been no happy ending. Now that they're safe, you can bet there will be a hundred versions of their story on the big and small screens.

Hollywood's City Slickers are masters of flexible thinking.

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